#Drybulk Thread:
1)
Drybulk is currently showing signs of a beautiful generational setup. With macro volatility increasing rapidly, there is no saying where equities might trade in the next couple of weeks, but this is the time to be prepared.
1)
Drybulk is currently showing signs of a beautiful generational setup. With macro volatility increasing rapidly, there is no saying where equities might trade in the next couple of weeks, but this is the time to be prepared.
https://twitter.com/ManihiB/status/1636763206231400448
2)
Before I lay out the bull case I think it's worth looking back at 2020-2022. I would argue this whole period should be written off as a "one off."
2020 was the beginning of COVID. World shut down. Rates went to zero in Feb and Mar.
Before I lay out the bull case I think it's worth looking back at 2020-2022. I would argue this whole period should be written off as a "one off."
2020 was the beginning of COVID. World shut down. Rates went to zero in Feb and Mar.
3)
2021 everything turned. Congestion and covid inefficiencies reduced supply substantially and rates 🚀.
2022 was the "Chinese lockdown" combined with a crash in Chinese real estate and Vale declining production. So lets look at 2019...This was when the real recovery started.
2021 everything turned. Congestion and covid inefficiencies reduced supply substantially and rates 🚀.
2022 was the "Chinese lockdown" combined with a crash in Chinese real estate and Vale declining production. So lets look at 2019...This was when the real recovery started.
4)
After 7-8 horrible years in drybulk Q3 2019 was the turning point. Q3-Q4 2019 saw Capesize rates around 25k.
I would argue we are at the cusp of another turning point, or maybe rather, a continuation of what had already started in 2019.
After 7-8 horrible years in drybulk Q3 2019 was the turning point. Q3-Q4 2019 saw Capesize rates around 25k.
I would argue we are at the cusp of another turning point, or maybe rather, a continuation of what had already started in 2019.
5)
Still, lots have happened since 2019:
- Inflation.
- EEXI and other regulations.
- Yard slots taken by container (and soon tankers....)
-Capesize orderbook has gone from 15% in 2019 to 6% today.
- Avg age of the Capesize fleet has gone from 7.5yrs in 2019 to 10yrs today.
Still, lots have happened since 2019:
- Inflation.
- EEXI and other regulations.
- Yard slots taken by container (and soon tankers....)
-Capesize orderbook has gone from 15% in 2019 to 6% today.
- Avg age of the Capesize fleet has gone from 7.5yrs in 2019 to 10yrs today.
7)
Vale's production target for 2026 is 340-360mt. Compared to 308mt in 2022.
Vale has a bad habit of disappointing, but if end game is anywhere near 10-15% increase in production then fleet utilisation should improve a lot.
Vale's production target for 2026 is 340-360mt. Compared to 308mt in 2022.
Vale has a bad habit of disappointing, but if end game is anywhere near 10-15% increase in production then fleet utilisation should improve a lot.
8)Risks to the bull thesis will always be "China blow up" and "Vale disappointing", but the setup today has the potential of being a multi-year party.
$GOGL $SBLK $SHIP
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$GOGL $SBLK $SHIP
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